Residential MLS sales for a snowy February showed prices up and sales down in Kitchener Waterloo. There were 324 properties sold consisting of 18 new or to be built homes and 306 resales. This represents a decline of 12% over February 2012 results.
Regular readers will know I'm not one to make excuses for an underperforming market. However, let's not underestimate the impact of over 2 feet of snowfall. To put that in perspective, nearly as much snow fell in February as all of last winter combined!
New homes sales in Kitchener Waterloo increased to 18 from 15 last February. Note these numbers are still down sharply from the 61 and 41 new homes sold on MLS in 2011 and 2010 respectively.
Resale homes then surprisingly accounted for the decline with sales off about 13% year-over-year. It took successful Realtors and their sellers an average of 43 days to put up the sold sign and they realized, on average, 97.5% of their asking price. In February 2012, these numbers showed 37 days and 98% so some signs of softening are apparent in the local market.
As noted in my last blog post, average sales prices in Kitchener Waterloo in February were up an eye-popping 7.5% year over year driven by move up buyers taking advantage of low interest rates.
So if sales are down and there are signs of softening in the market, what's going on with prices? The answer still comes back to supply and demand. There are just 1215 properties for sale on MLS currently consisting of 315 new or to be built properties and 900 resales. The resale market has about a 3 month supply of properties which makes it a sellers market.
What will the spring market bring for Kitchener Waterloo real estate? In short, more of the same. I expect local Kitchener Waterloo homebuilders with properties targeting first time buyers to outperform. Investors are also buying these properties as positive cash flow can be found. With resales, we won't hit the numbers we have in past years but the glass will still be half full. The local economy continues to perform well. Interest/mortgage rates are projected to remain at or near all time lows until late 2014 as the US tries to reinflate real estate prices and Canada gets taken along for the ride.
As always, markets are local and your neighbourhood may be better or worse than average. If you'd like help figuring out where you fit into the Kitchener Waterloo real estate market, feel free to touch base. You can reach me at 519-505-4488 or firstname.lastname@example.org.
Century 21 Home Realty Inc. Brokerage
"Delivering results since 1989"